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Make New Products Difficult To Copy

Mature industries like consumer products are rife with conventional wisdom about innovation that goes something like this: The secret to growth in the consumer goods arena is to develop new products based on consumer needs, which are discovered through consumer research and focus groups.

Even if the idea is so-so, the feeling goes, strong marketing and advertising can turn the concept into a hit. And the first to market will capture most of the profits. This kind of thinking leads to cultures that deliberately develop a long list of line extensions -- new flavors of an established soda brand, say -- rather than game-changing innovations.

The alternative -- one that can help rejuvenate a tired portfolio or a worn-out brand -- is to think about your innovation strategy as a way to build a high, hard wall between those customers and their strongest competitors. This means shifting some investment away from marketing and advertising toward the development of different kinds of new products. The most important thing about these game-changing new products is that they be difficult to copy.

Booz & Co. consultants Alexander Kandybin and Surbhee Grover helpfully set out a seven-step path to breaking the cycle of copy-cat innovation. But it's undermined somewhat by their trepidacious conclusion: "The magic formula for keeping innovation healthy in a mature industry is knowing there is no magic formula."

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